June 4, 2023

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The Saudi Electricity Company assigns Twilio engineers to insider trading

The Saudi Electricity Company assigns Twilio engineers to insider trading

The Securities and Exchange Commission on Monday commissioned three software engineers with the cloud software vendor Twilio Many of their friends and family members are involved in an insider trading scheme.

Between March and May 2020, with increased use of cloud tools due to increased remote working, Twilio engineers Lokesh Lagudu, Chotu Pulagam and Hari Sure were able to access financial information from company databases. Through a private chat group, they shared this information with others, who then executed deals prior to Twilio’s announcement Results for the first quarter of May 2020according to complaint Filed in US District Court for the Northern District of California.

Twilio’s results raised previous estimates and the stock rose significantly. Because of the scheme, the group made more than $1 million in profits, the SEC said.

It is a topic of increasing interest from regulators. The Securities and Exchange Commission has Proposed new rules Surrounding stock sales executives, and The investigation responded sell by Tesla Member of the Board of Directors of Kimbal Misk. Meanwhile, US lawmakers Discuss bills That would prevent members of Congress from buying and selling shares.

The three Twilio engineers sat on a team responsible for billing customers, and each signed an agreement that they would not provide non-public information in a way that could end in illegal trade. Twilio software helps companies connect with customers.

Sure he passed on the information about the data to his friend Dilip Kamogola, and Pulagam gave the details to his brother Chetan Pulagam. Lagudu gave information to his girlfriend Sai Nikalabody and his friend Abhishek Dharmapurikar.

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After receiving the information, Sure sent about $10,000 to Kamujula, who then purchased Twilio’s communication options. The complaint said Nikalabody and Chetan Pulagam simultaneously sought permission to trade options from brokerage accounts they had not used in years.

Monique C. Winkler, acting regional director for the SEC’s San Francisco regional office, said in a statement press release. “We hold these alleged tippers responsible for their role in the scheme.”

Separately, the US Attorney’s Office for the Northern District of California has filed criminal charges against Kamogula, accusing him of securities fraud in connection with his trading. SEC fees are civil in nature and primarily require monetary penalties.

A Twilio spokesperson was unable to confirm the employment status for Lagudu, Pulagam or Sure.

“The company is aware of the investigations being conducted by the US Attorney’s Office and the Securities and Exchange Commission and the charges filed today,” the spokesman said. “The company fully cooperates with both agencies.”

It is alleged that Twilio engineers communicated in a private chat group, exchanging messages in Telugu, a language mostly spoken in South India. Based on customer data, they said in the group that the stock will definitely go up after the results.

The SEC said in the complaint: “Lagudu disclosed in the chat channel that it ‘examined’ the internal revenue database and determined that ‘SMS and other costs increased this month’ and likewise, email revenue increased.”

Lagudo told colleagues that some customers were sending three times as many messages as they had previously, noting that the group noticed that one customer had gone from tens of thousands of dollars in revenue in previous months to nearly $2 million in March.

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Two days before Twilio released first-quarter results, according to the complaint, Sure said in the chat group that it appeared the stock would jump to $150 from about $110 at the time, prompting Chotu Pulagam to respond, “Miillionaireeeeeee.”

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